"The rate cut a quarter of a point brings the Fed's key rate down to about 3.9%, from about 4.1%. The central bank had cranked its rate to roughly 5.3% in 2023 and 2024 to combat the biggest inflation spike in four decades before implementing three cuts last year. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans."
"Compounding its challenges, the central bank is navigating without the economic signposts it typically relies on from the government, including monthly reports on jobs, inflation, and consumer spending, which have been suspended because of the government shutdown. Financial markets largely expected another rate reduction in December, and stock prices dropped after Powell's comments, with the S&P 500 nearly unchanged and the Dow Jones Industrial Average closing slightly lower."
The Federal Reserve reduced its key interest rate by a quarter point to about 3.9% from about 4.1% to support economic growth and hiring while inflation remains elevated. The central bank had previously raised rates to roughly 5.3% in 2023 and 2024 and implemented three cuts last year. Fed Chair Jerome Powell warned that further reductions are not guaranteed, noting sharp divisions among the 19 officials who decide rates and the suspension of monthly government reports due to a shutdown. Financial markets had largely expected a December cut and stocks fell after Powell's remarks.
Read at www.eastbaytimes.com
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